PE2: New procurement law a big boost to GEMP
MAKATI CITY, 21 July 2024 – The Philippine Energy Efficiency Alliance (PE2) issued today a statement in reaction to yesterday’s passage of Republic Act No. 12009, better known as the New Government Procurement Act (NGPA). PE2 said that new enacted legislation would greatly support the needs of government entities to implement energy efficiency upgrades under the Government Energy Management Program (GEMP) through the life-cycle based modality of procurement.
PE2 president Alexander Ablaza said, “The explicit inclusion of life-cycle cost modality of government procurement will shift competitive pricing for purchases and contracts for energy efficiency upgrades away from initial capital outlays to the total cost of ownership through the useable life of the capital equipment. In many cases, the cost of energy, typically electricity consumption, is the most significant component of life-cycle cost, often outweighing the acquisition cost of the delivered and installed equipment.”
He adds, “The new law will therefore allow procurement of technologies, solutions and services yielding the lowest life-cycle costs by selecting the offer delivering the optimal energy efficiency and overall quality. This was hardly possible under the predecessor government procurement law, which anchored competitive bid selection on the lowest initial capital cost.”
“PE2 sees such procurement policy reform as a huge catalyst to energy efficiency improvements in government buildings, public street and outdoor lighting and other energy uses in public infrastructure such as water supply, treatment and distribution and sewage treatment,” Ablaza explained.
In the PE2 statement, the Alliance aired its hope that the implementing rules and regulations of RA 12009 would have specific provisions enabling the government procurement of energy service company (ESCO) performance contracts, which were not possible under the superseded procurement law, RA 9184.
On 20 July 2024, RA 12009 was formally signed into law by President Ferdinand Marcos Jr. in Malacañang. The new law will enhance public services and promote greater transparency, as it streamlines procurement procedures for both national government agencies and local government units (LGUs). In a news release by the Senate on the same day, Senate Majority Floor Leader Francis Tolentino explained that NGPA considers “life-cycle cost of goods and services, including energy efficiency, recyclability, and environmental impact.”
To read the Senate press release on the passage of RA 12009: https://legacy.senate.gov.ph/press_release/2024/0720_tolentino1.asp
